Billionaire Petr Kellner’s investment company PPF Group is exploring options for a sale of a stake in its telecommunications company O2 Czech Republic, according to people familiar with the matter.
PPF is weighing alternatives including the sale of a minority stake or its entire holding, said the people, asking not to be named because the details are private. No final decisions have been made and PPF may decide against a transaction if it can’t get the right price, they said. PPF owned about 84% of the former phone monopoly as of the end of last year.
While PPF has gotten interest from potential investors in both O2 and its infrastructure unit, Ceska Telekomunikacni Infrastruktura, “we are not in talks with any banks in the sense of your speculation,” Zuzana Migdalova, a company spokeswoman, said in an e-mailed statement.
Shares in O2 Czech, which has a market value of about 72.3bn koruna ($3bn), have rallied more than 300% since the company spun off the infrastructure assets last year to ease regulatory hurdles and boost profitability. Investor demand has been further bolstered by the return of the carrier’s stock to the MSCI indexes, a higher dividend and share buybacks.
PPF would also consider finding a long-term, minority investor for the infrastructure business to help fund growth, one of the people said.
The split helped O2 Czech expand its business and reverse years of declining profits, boosting its net income by 44% last year to 5.1bn koruna. The share price has also benefited from the company’s announcement last October of a new policy to pay out 90% to 110% of its profits and to buy back as much as 10% of its stock over five years.
PPF bought a majority stake in the phone and Internet company from Spain’s Telefonica SA in 2013 for about $3.4bn. While Kellner, the Czech Republic’s richest person, has since taken steps to squeeze out minority shareholders from the new infrastructure unit he has refrained from the same move in O2 Czech. PPF said it plans to keep the company listedand that the unit is a financial investment.
O2 Czech’s shares were little changed at 233.20 koruna at 11:04am in Prague yesterday.